"The Greek economy is improving, which should benefit the banking sector," Mr Paulson told the Financial Times. He confirmed his fund, Paulson & Co, had substantial stakes in Piraeus and Alpha, the two banks that have emerged in best shape from the crisis. "[Both] are now very well capitalised and poised to recover [with] good management," he said in rare public comments.

Paulson & Co is the highest profile of the hedge funds to invest aggressively into Greek banks. Others include Baupost, Eaglevale, Dromeus Capital, Falcon Edge, York Capital and Och-Ziff, according to people close to the situation. Long-only funds, including Wellington Capital Group and Fidelity, have also taken positions.

Yes, in case you were wondering, there's an ETF for that. Global X FTSE Greece 20 (GREK) is surging by 3.8% on Monday.

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